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How much of a house (or loan) you can afford or qualify for are two different things.
It may be that you are qualified for a higher loan amount and payment than what you may be comfortable with.
Conversely, you may be comfortable with a larger house payment because you don’t use a lot of other debt like,
car loans or credit cards.
I have done a lot of loans for people that were easily qualified for a $200,000. loan, but were more comfortable
with the payments on a loan for $150,000.
In general if you want to get a good idea of how much of a house payment you can qualify for here’s what you can
do;
1. Call John Robson at 208-378-7094 office or 208-371-8015 cell or
2. Add up your gross monthly household income before taxes and multiply by 39% then
3. subtract monthly debt payments such as credit card payments. But do not include
rent, utilities or insurance.
4. The remainder is the amount of income available for a house payment.
* Remember that the total house payment will include real estate taxes, hazard insurance and possibly some
mortgage insurance.
Assuming that taxes are going to be $130.00 per month, hazard insurance $35.00 and mortgage insurance at
$85.00. Together these are known as escrows. In this case they total $250.00. This will leave $893.00 per month
for principle and interest on the mortgage.
If the current interest rate on a 30 years fixed rate loan is 6% this will translate into a mortgage of approximately
$148,000.00
Please note that the above information is put in very general terms and will fit 90% of loan programs out there, but
there are exceptions to just about everything. There are loan programs to fit nearly every situation.
I have included links to mortgage calculators where you can do more detailed estimates on our links and resources
page. You are also welcome to contact me and we can go over your individual circumstances and I will provide
detailed payment and closing cost estimates.